Composable Finance
Published in

Composable Finance

Understanding Composable’s modularly interoperable infrastructure

Composable’s vision is to provide an interoperable infrastructure for modular DeFi functionality. A vision which will be discussed in more detail at our inaugural conference, Unchained. Below we will detail what this means, and how we are able to achieve it by utilizing our technology stack, which when combined serves as the catalyst for DeFi’s final frontier — Composability.

The Interoperable Infrastructure for Modular DeFi Functionality

Together with our interoperable infrastructure will usher in an era of modular DeFi functionality, unlike anything before it. The basis of modular functionality is that a program, or in this case a decentralized application, can be separated into interchangeable modules capable of functioning independently. Composable’s technology stack provides the modular functionality required for the creation of native cross-chain applications. It consists of Composable’s Application Layer, the cross-chain virtual machine (XCVM), the Routing Layer, the Transport Layer, and the Infrastructure Layer.

What modular functionality looks like in practice is a dApp where each module is deployed on the chain or layer where it can operate most efficiently. Currently, however, there are several major roadblocks developers would encounter when attempting to launch a modular cross-chain application. These roadblocks include:

  • Lack of a communication standard
  • Reliance on trusted cross-chain bridges
  • Developers must interact with different programming languages and VMs

Ultimately, these roadblocks make it impossible to deploy sustainable cross-chain solutions. Together our tech stack is able to overcome these challenges. Below we will detail how the application, routing, transport and infrastructure layers ultimately come together to enable native cross-chain applications via the XCVM.

Application Layer

Composable is the first to implement the CosmWasm smart-contracting framework within the Substrate and DotSama ecosystems. The application layer consists of applications that are deployed on the Composable XCVM. Composable’s cross-chain virtual machine (XCVM) is our novel solution to facilitate the orchestration of cross-chain applications, by using the CosmWasm framework for smart contracts.

The image above captures the different layers of the Composable technology stack.

Routing Layer

The routing layer assesses all possibilities for a given action and selects the optimal solution for the user. What this means is that developers can focus on their desired outcome (e.g token swap, loan, bridge etc) rather than focusing on how to achieve that outcome. The DeFi space is constantly evolving and as the industry continues to grow it will become increasingly difficult to find these optimal solutions on your own. The routing layer will act as a function aggregator so that users won’t have to search across the DeFi landscape themselves for the most efficient solutions.

The routing layer ensures the XCVM takes the most efficient path for a given action. It achieves this through the use of two incentivized parties:

  • Indexers — act as oracles who are responsible for updating the graph any time there is a significant change in network topology. Indexers receive rewards when their updates are implemented on the main graph, and a slashing mechanism will be used to prevent malicious indexers.
  • Solvers — determine the best route for any given problem. Solvers earn rewards based on the efficiency of their solutions.

Transport Layer

The Composable transport layer primarily consists of Centauri, Mosaic and the XCM. In combination, they enable interoperability between Composable, chains and protocols within every major DeFi ecosystem.

Mosaic’s functionality extends far beyond that of a traditional bridge, connecting to EVM-compatible chains and scaling solutions such as Moonriver, Fantom, AVAX, Polygon, Arbitrum, Optimism, Starknet and more. Furthermore, Mosaic serves as the first bridge EVM < > Substrate bridge. Mosaic implements strategies to ensure sufficient liquidity across all chains through the leverage of existing bridging infrastructure. Mosaic achieves this through the utilization of a dynamic fee model, passive liquidity rebalancing and active management.

Centauri is a trustless bridge that provides secure asset transfer and exchange between the Kusama ecosystem, through Picasso, to the IBC. Utilizing the IBC as a transport layer, the XCVM uses cXCM (a subset of XCM messaging) to pass messages from a satellite contract on chain A to a satellite contract on chain B.

Centauri was built to connect Composable to chains that make use of light clients, and as such serves as the first connection point between DotSama and the IBC protocol. Centauri uses a proprietary BEEFY light client to enable efficient bridging to IBC-enabled chains, with clearly established finality proofs. As such, liquidity movement between Composable and IBC-enabled chains is both cost-effective, and safe.

The IBC allows for trustless passing of data between light client enabled blockchains. This gives us a reliable communication standard and the ability to orchestrate complex cross-chain applications. As the Centauri bridge is able to connect to any chain that integrates light clients, Composable will be able to extend Centauri to become interoperable with other blockchains as well, such as the NEAR protocol.

Infrastructure Layer

The infrastructure layer consists of the dual Kusama and Polkadot parachains (Picasso and Composable) that undergird the Composable ecosystem, and its pallet architecture, which is leveraged for the development of applications. The parachains provide enhanced security, customizability and blockchain efficiency.

The XCVM’s contract layer will be built as a pallet (Pallet — XCVM), which means developers will have the ability to write contracts that interface with and call the underlying primary, secondary and tertiary pallets hosted on our parachains.

Primary pallets provide the essential building blocks found within any DeFi ecosystem. These pallets are meant to give the developers the fundamental functionality they are used to, such as oracles, vaults, and bridging infrastructure. Examples of some primary pallets we have been building include:

  • Apollo — an MEV resistant oracle solution
  • Cubic — the first DotSama vault pallet
  • Mosaic — transfer availability layer
  • Centauri — the first Substrate-IBC bridging infrastructure pallet
Pallets on Picasso function like DeFi legos and can be stacked and separated to rapidly deploy new services and innovations.

The power of providing this interoperable infrastructure is that ultimately none of these pallets will stand alone. Each of our primary pallets can be leveraged when creating a new pallet, such that the whole becomes greater than the sum of its parts. This is the power of modular functionality, which starts to become apparent when we look at secondary pallets.

Due to our primaries’ modular nature, secondary pallets can leverage the functions of several primary pallets to create something new. For example, DeFi applications require oracle and vault solutions. Rather than developers reinventing the wheel any time they need to spin up a new application, they can simply tap into whatever core functionality they require from our primary pallets. Tertiary pallets leverage the primaries and secondaries to create even more sophisticated applications.

Conclusion

The Composable technology stack as a whole forms the infrastructure needed to build robust applications that are natively cross-chain. We are looking forward to discussing some of these applications in more depth leading up to our Unchained Conference slated for 1st July in Berlin. Unchained will bring together leading industry experts to discuss cross-chain and DeFi interoperability. Registration for the event is live — get your tickets at the earliest!

--

--

--

Composable Finance is a robust cross-chain and cross-layer infrastructure including an array of intuitive developer tools and a vibrant decentralized community

Recommended from Medium

Blue green deployment

Why CSS?

Nginx Docker And The Hidden Hooks

Testable March Feature Roundup

Instant Realtime APIs using PostgreSQL, MySQL, SQLite, SQLServer and Planetscale.

Oh No! The Enemy Have Shields!

GeoServer Code Sprint 2017

rest-api

Web Components for Enterprise. Part 2: Nuxeo, Ionic, Vaadin

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Composable Finance

Composable Finance

Composing DeFi for Mass Adoption

More from Medium

Bifrost SALP Supports Imbue Network Kusama Crowdloan

StakeFi Could be the Next DeFi Focuse | PW Interview with Bifrost

Weekly news from Kusama&Polkadot #34

Phala Is A Sponsor of Consensus 2022, SubBridge Opens HRMP Cross-Chain Channel with Bifrost,|…